Internet smartwatch orders net $2 million for start-up
TORONTO (Reuters) - A Canadian entrepreneur's smartwatch, which works alongside a user's smartphone, has won $2 million worth of orders through an Internet-based funding venture that offers cash-starved companies a way to both test their ideas and raise funds.
Eric Migicovsky initially sought $10,000 over a five-week period through Kickstarter (www.kickstarter.com), a website set up to encourage small-scale funding for innovative projects. In just three days, the project has brought in $2.1 million, amounting to orders for almost 17,000 watches at a starting price of $115 each. Bulk orders are cheaper.
Migicovsky, who has been working on smartwatches for three years, moved his company, Pebble Technology, from Research In Motion Inc's hometown of Waterloo, Ontario, to Google's hometown of Mountain View, California, in June.
He said Pebble Technology decided to go directly to customers after failing to raise interest among Silicon Valley investors.
"We tried to raise money, it was impossible. No one really wants to fund hardware projects right now, except for the people that want to buy them," he said.
Pebble watches work with iPhones or with smartphones that use Google Inc's Android operating system. They can display distance and speed for runners and cyclists, control a smartphone's music, and show emails, messages and reminders. Pebble plans further applications before it starts shipping the watches in September.
Under the Kickstarter model, a project's developer must set a deadline for reaching its funding goal. If time runs out, no money changes hands. Kickstarter says this protects both parties as buyers don't pay until developers have adequate funds to develop their project.
Migicovsky said Pebble would likely boost its team of six by several more engineers to develop features for the watches. He said interested investors have approached him since the orders starting flowing in, but he declined to provide further details.
His smartwatch will compete with one released this month by global electronic giant Sony Corp, a gadget that works with Android phones.
"We'll let people vote with their wallet," he said.
(Reporting by Alastair Sharp; Editing by Janet Guttsman)